A Method for Evaluating Individual Stocks

While studying Huarong's investment philosophy, we encounter key survival rules in the stock market, including criteria for evaluating stocks. One notable method is: Market Trend + Themes + Volume + Moving Averages + MACD + K-line Logic + Psychological Discipline. Below is a detailed breakdown.

1. Market Trend

The overall market condition is primary:

• Trade stocks when the market is strong; avoid or limit trades during weakness.

• High trading volume is positive; low volume signals caution.

• Monitor the 10-day and 30-day moving averages—upward trends are favorable.

2. Themes

Themes drive stock rallies, hence the saying: "Themes are the primary productivity." Focus on:

• Macro themes (e.g., free-trade zone policies).

• Stock-specific themes (e.g., Beijing Urban Construction).

• Short-term hot topics.

3. Volume

• Real-time volume: High volume, turnover rate, and total transaction value are ideal.

• Historical data: Track changes among the top 10 tradable shareholders.

4. Moving Averages

• Bullish alignment (e.g., 5-day > 20-day MA) is preferred.

• Prices near key MAs signal stability; deviations indicate risk.

• Converging MAs often precede trend reversals.

5. MACD

• Golden Cross: A classic buy signal.

• Lines above the zero axis: Indicate bullish momentum.

6. K-line Logic

Key candlestick patterns:

• Morning Star: Suggests a bottom reversal.

• Single Yang Unbroken: A consolidation pattern.

• Harami: Potential trend reversal.
  (Refer to dedicated sections for more patterns.)

7. Psychological Discipline

Mindset is critical:

• Avoid impulsive trades, especially during downturns.

• Professionals follow discipline: trade actively in uptrends, rest during downtrends.